Speaker 1: Millions of Americans take prescription drugs, but how many of
Speaker 1: us really know how they were developed or how they
Speaker 1: even work. For most of us, drugs are just there
Speaker 1: when you pick up your prescription from the pharmacy. You
Speaker 1: don't think about the billions of dollars that went into
Speaker 1: the research or the scientific breakthroughs that paved the way.
Speaker 1: Welcome to Prognosis, a podcast about health, medical technology, and
Speaker 1: the mind blowing innovation that's underway across the globe. I'm
Speaker 1: your host, Michelle fay Cortez. This week, we're hearing the
Speaker 1: story of the strange, circuitous path of one drug from
Speaker 1: the Eureka moment to the market. It's a story about
Speaker 1: a Nobel Prize winner, cutting edge genetic research, billions of
Speaker 1: pharmaceutical dollars, and of all things, a worm. In August,
Speaker 1: all Nylum, a seven billion dollar biotechnology company, one approval
Speaker 1: to market its first drug. The company hopes it will
Speaker 1: save the lives of roughly fifty patients who suffer from
Speaker 1: a rare and ultimately fatal disorder. But the price sounds outrageous.
Speaker 1: Beach patient, or rather the federal government and their insurance companies,
Speaker 1: will have to pay about three forty five thousand dollars
Speaker 1: every year. Here's Rebecca's Balding, Bloomberg's Boston Biotech Reporter on
Speaker 1: the sixteen year journey of a single drug. I'm here
Speaker 1: in Cambridge, Massachusetts, the global capital of the drug industry.
Speaker 1: As a pharmaceutical executive told me recently, what New York
Speaker 1: is to finance and Paris is to culture, Cambridge is
Speaker 1: to science. Its heart is a place called Kendall Square,
Speaker 1: next at M. I. T. Kendall Square used to be
Speaker 1: a rundown neighborhood full of empty candy factories. Now the
Speaker 1: neighborhood is full of gleaming buildings and companies with names
Speaker 1: that suggest scientific expertise and mystery genzyme biogen voyager. Their
Speaker 1: market values are usually counted by the billions. When you're
Speaker 1: walking around the streets, you get the feeling that people
Speaker 1: hidden behind glass walls are making decisions about the future,
Speaker 1: possibly your future. Al Nylum is one of those companies.
Speaker 1: All Nylum is named after the center star in Orion's belt,
Speaker 1: the brightest in the constellation. It's a fitting metaphor. Al
Speaker 1: Nylum is the platonic ideal of a biotech company. Sixteen
Speaker 1: years ago, a group of scientists here wanted to take
Speaker 1: an obscure insight about genetics and turn it into a drug.
Speaker 1: This is the story about that drug, but it's also
Speaker 1: a story about the biotech industry itself and what happens
Speaker 1: behind those glass walls and it all be I'm back
Speaker 1: in the late seventies when a story in the Washington
Speaker 1: Post piqued the interest of a high school student named
Speaker 1: Craig Mellow. Today, Craig is fifty eight years old. I
Speaker 1: spoke to him on the campus of the Massachusetts Medical
Speaker 1: Center in Worcester, where he runs a genetics lab. I
Speaker 1: don't really know what to call Craig. My producers tell
Speaker 1: me first names worked better for podcasts, But the reality
Speaker 1: is Craig has a Nobel Prize. But Dr Mellow doesn't
Speaker 1: sound right either. Craig is tall and athletic, with long
Speaker 1: gray hair. I would pay him more as an enlightened
Speaker 1: surfer pondering the universe than a celebrated molecular biologist. Here's
Speaker 1: what started his interest in genetics. I got really fascinated
Speaker 1: by genetics when I learned that the human insulin gene
Speaker 1: could be expressed in bacteria that you could actually take
Speaker 1: the human gene for insulin, put it into bacteria, and
Speaker 1: the bacteria could make the human insulin protein. And I
Speaker 1: read that in the Washington Post and I said, you know,
Speaker 1: that's been to myself. That's incredibly powerful. Most people didn't
Speaker 1: know it yet, but that discovery was the biotechnology industry's
Speaker 1: big bang, the moment that would change medicine forever. Researchers
Speaker 1: had shown that could make insulin a human hormone in
Speaker 1: a lab. Here's why that's such a big deal. Most
Speaker 1: medicines before then had been simple chemicals. Truth be told,
Speaker 1: many of them didn't even work that well. Synthetic insulin
Speaker 1: was one of the first medicines made from human cells,
Speaker 1: and it worked beautifully. Diabetics who had previously relied on
Speaker 1: insulin made from pigs and cattle finally had the real thing.
Speaker 1: It was also an innovation that made Craig want to
Speaker 1: go into medical research. Yeah. I always was interested in
Speaker 1: the history of life and fossils, but the genetic information
Speaker 1: inside of every cell in our bodies is a living fossil,
Speaker 1: I'd say. I was so intrigued by the fundamental quest
Speaker 1: gens of origins, even if it weren't applicable to anything.
Speaker 1: I think it would be really fascinating and important to
Speaker 1: try to understand this. But of course it turns out
Speaker 1: that by understanding fundamental mechanisms of of biology, we can
Speaker 1: make really important medicines like insulin. Craig decided to study
Speaker 1: DNA specifically how he might be able to tinker with it.
Speaker 1: Put simply, DNA as our body's blueprint, the master code
Speaker 1: that lays out all of its processes. But it's just
Speaker 1: the blueprint. To actually create life, you need a builder
Speaker 1: and raw materials too. That's where a molecule called ribonucleic
Speaker 1: acid or RNA comes in. If you're wondering what any
Speaker 1: of this has to do with developing a drug, specifically
Speaker 1: al Nylums drug, stick with me. But first let's go
Speaker 1: over some basic molecular biology. It's really simple, I promise.
Speaker 1: If DNA is the blueprint, RNA is the contractor that
Speaker 1: gets hired to actually build the building. It reads the
Speaker 1: architect plans and carries them out. In this scenario, Proteins
Speaker 1: are the equivalence of brick or drywall. Proteins are what
Speaker 1: the body is actually made up of. They make up
Speaker 1: your hair, your eyes, your heart, every cell. RNA is
Speaker 1: what creates them by reading the DNA's code and turning
Speaker 1: that code into proteins. Most of the time this goes well,
Speaker 1: except when there's an air in the blueprint. Defective DNA
Speaker 1: turns into defective proteins, which in turn caused disease. And
Speaker 1: in all of these cases, even though DNA has an error,
Speaker 1: the RNA still repeats it. An error in one protein
Speaker 1: may sound benign, but it's not. It's what causes disease.
Speaker 1: That's why tinkering with DNA was so allerting for researchers.
Speaker 1: If scientists like Craig could figure out how to change
Speaker 1: the blueprint, they could prevent disease. That's key for later
Speaker 1: on in the episode when we'll hear about how this
Speaker 1: drug was actually developed. But back when Craig was first tinkering,
Speaker 1: he was about as far as you could be from
Speaker 1: developing a drug for human beings. For his experiments, Craig
Speaker 1: worked on worms, yes, worms, specifically a species known as C. Elegants.
Speaker 1: It's a favorite creature among genetic researchers because it's so simple.
Speaker 1: It only has about a thousand cells humans have thirty
Speaker 1: seven trillion. It's tiny only about one millimeter long and transparent.
Speaker 1: You can see through all those cells under microscope. Despite
Speaker 1: its small size, it has a nervous system. That's key.
Speaker 1: The hope is that discoveries made on these animals might
Speaker 1: also work in people. Craig had always been interested in
Speaker 1: changes in DNA, but when he started his scientific career
Speaker 1: after grad school, something surprising happened. Other researchers around the
Speaker 1: country were experimenting not on DNA but on RNA. They
Speaker 1: were getting strange, even inexplicable results. Craig decided to try
Speaker 1: it for himself. I discovered some really weird things were happening,
Speaker 1: really really awful, but weird. When Craig injected his worms
Speaker 1: with DNA, he would have to inject them into the
Speaker 1: worm's reproductive organs. Genetic changes would then appear in the
Speaker 1: next generation and its children. But if he missed and
Speaker 1: accidentally injected the DNA into a worm's gut, nothing would happen.
Speaker 1: There wouldn't be any changes in that worm where his children.
Speaker 1: The DNA would just degrade disappear. But with r n A,
Speaker 1: Craig could inject the worm anywhere, even in the gut,
Speaker 1: and it would still have an effect. What was even
Speaker 1: stranger was that these effects were so strong and only
Speaker 1: would it last through that animal's life, but it would
Speaker 1: pass on to the next generation. Craig didn't know why
Speaker 1: that would be. All he knew is that that shouldn't
Speaker 1: be happening. He decided to call his longtime collaborator, Dr.
Speaker 1: Andrew Fire. It was very surprising, and I, of course
Speaker 1: I was very very interested in, you know, how that
Speaker 1: could be happening and it. I called up Handy and
Speaker 1: we spent hours talking about experiments. We talked about how
Speaker 1: this might what this might be. Slowly they realized what
Speaker 1: they had discovered. By tinkering with RNA instead of DNA,
Speaker 1: they could eliminate a wrong message sent by a bad
Speaker 1: DNA blueprint. It was as if the contractor never showed
Speaker 1: up for work. The faulty building never got built. Craig
Speaker 1: and doctor Fire continued to experiment and began publishing their results.
Speaker 1: In two thousand and six, they would win the Nobel
Speaker 1: Prize for discovering the phenomenon now known as RNA interference.
Speaker 1: People hoped it could usher an as dramatic a medical
Speaker 1: revolution as the insulin discovery Craig had read about in
Speaker 1: the Washington Post eight years earlier. Their work delighted scientists
Speaker 1: could researchers finally be able to treat genetic disease, but
Speaker 1: it also fired up entrepreneurs. Was their need to be made?
Speaker 1: The race was on. A research scientist named Rachel Myers
Speaker 1: answered the call back in Cambridge, Massachusetts. Rachel signed on
Speaker 1: as one of al nylum's first employees. Rachel has a
Speaker 1: near perfect scientific resume. She earned her PhD from m
Speaker 1: I T and completed a post doc at Harvard Medical School.
Speaker 1: She was working at another hot biotechnology company in town
Speaker 1: when she got the call to join a nylum in
Speaker 1: two thousand three. She stayed for fourteen years. Most of
Speaker 1: that time I spent working on one central problem, one
Speaker 1: that's pretty common in the biotech industry. How do you
Speaker 1: turn breakthrough research into something patients can actually use? Very quickly,
Speaker 1: it became clear that there was one enormous challenge, and
Speaker 1: that challenge is what we call the delivery challenge. In
Speaker 1: order to make a drug that works by this mechan
Speaker 1: is and you have to make a piece of RNA
Speaker 1: and you have to introduce it into the cells. And
Speaker 1: that sounds easy when I say it, but it turns
Speaker 1: out that's extremely difficult, and it's difficult because an RNA
Speaker 1: drug has two properties that make it very much not
Speaker 1: a good kind of medicine. And the simple properties are
Speaker 1: it's um got very high charge and it's big, very
Speaker 1: very big. So it's probably, let's see, thirty times larger
Speaker 1: than a normal drug like an aspirin that you would take,
Speaker 1: and that makes it very difficult to think about how
Speaker 1: you deliver it, get it to the places it needs
Speaker 1: to go. At what point did you realize that that
Speaker 1: was going to be the major challenge in the very beginning,
Speaker 1: and in fact, people all over the world talked about
Speaker 1: that as the challenge with developing drugs and RNA interference
Speaker 1: the delivery challenge. So you joined on nyleum knowing that
Speaker 1: that was going to be the major little If you
Speaker 1: miss some of that, like RNA having a high charge
Speaker 1: and being large, don't worry. You're not alone. You don't
Speaker 1: have to understand the details. But here's why it matters.
Speaker 1: What made r N a I so interesting in worms
Speaker 1: was that you can inject it anywhere and it worked.
Speaker 1: But that was worms. This was humans, and taking a
Speaker 1: drug from worms to humans is almost impossible. In fact,
Speaker 1: as a reporter, I'm surprised to learn that's how really
Speaker 1: the science was in two thousand two when they started.
Speaker 1: If someone pitched me today with a scientific studies saying
Speaker 1: they cured disease and worms, I would honestly think they
Speaker 1: were Charlottean trying to get one over on unsuspecting reporters
Speaker 1: or investors. Worms are easy, humans are hard. Throughout this time,
Speaker 1: Rachel and her colleagues were also thinking about another challenge,
Speaker 1: what disease should they even focus on. Drug companies must
Speaker 1: choose which diseases they attack, and maybe the most important
Speaker 1: decision they make. These decisions aren't made in a vacuum.
Speaker 1: Drugs don't work in every illness, but in this case,
Speaker 1: in theory, at least, discovery could cure perhaps an unlimited
Speaker 1: array of diseases very quickly. However, that field narrowed, so
Speaker 1: as we continue to develop the technology, we learned something
Speaker 1: really important. The delivery challenge and the solution to the
Speaker 1: delivery problem lead us to a particular tissue, a particular
Speaker 1: part of the body, and that part of the body
Speaker 1: is the liver. And that was an enormous and important
Speaker 1: finding that the best candidates we had for making drugs
Speaker 1: worked by going to the liver. And so once I
Speaker 1: tell you that, then you say, okay. So now if
Speaker 1: we think about diseases, we have to think in a
Speaker 1: somewhat refined way, right, and we have to think about
Speaker 1: diseases for which a drug going to the liver is important.
Speaker 1: So we started a very elaborate exercise to ask the question,
Speaker 1: if we look out across medicine, what are the important
Speaker 1: diseases with unmet needs where a drug going to the
Speaker 1: liver will have an impact on that disease? That exercise
Speaker 1: would eventually lead researchers to a disease whose name is
Speaker 1: a mouthful. It's a type of hereditary amyloidosis. It's a
Speaker 1: disease so rare that it often appears as a mystery
Speaker 1: illness on shows like E. Rn House, where doctors aren't
Speaker 1: a race against time to figure out a diagnosis. Doctor,
Speaker 1: you have amyloidosis. Why should I believe him? Now? Television aside,
Speaker 1: the illness is incredibly rare and incredibly tragic. My middle
Speaker 1: age patients developed something called neuropathy, a kind of tingling
Speaker 1: that begins in their toes and fingers but progressively spreads
Speaker 1: sufferers eventually can't walk, their heart deteriorates, their stomachs can't
Speaker 1: process food, and they ultimately waste away and die. The
Speaker 1: disease is genetic, meaning that it runs in families. Some
Speaker 1: people get it and some people don't, but it comes
Speaker 1: on slowly. For some people can start in their twenties.
Speaker 1: For others it starts in middle age. If it ran
Speaker 1: in my family, there was no treatment for it. I'm
Speaker 1: not sure if I would want to know if I
Speaker 1: had it or not. Back when all Nylum started researching
Speaker 1: the disease, there was no approved drug that treated the
Speaker 1: underlying condition. But all Nyleum, with its approach of altering
Speaker 1: illness at the genetic level, stood a good chance at
Speaker 1: being able to address it. But they needed money. John
Speaker 1: Marganorri is the CEO of all Nylum. He's the only
Speaker 1: CEO of the company has ever had. He's a scientist
Speaker 1: by training. He got a PhD from the University of
Speaker 1: Chicago and is the son of Greek immigrants. In a
Speaker 1: profile I read about him, I found out he liked
Speaker 1: to play pool and smokes the accase general cigar, which
Speaker 1: I can totally see. I can tell you John is
Speaker 1: ubiquitous around Cambridge. He's one of the first CEOs I've
Speaker 1: met here, and I don't think that's a coincidence. He
Speaker 1: seems to pop up everywhere. Part of that is because
Speaker 1: as the CEO of al Nylum, John has seen it
Speaker 1: all Back when he joined the company, it needed money,
Speaker 1: and lots of it. When I joined, we had raised
Speaker 1: seventeen and a half million dollars. I mean, I knew
Speaker 1: when I started that we would need to take probably
Speaker 1: a decade or more before we had our first drug
Speaker 1: that would come out of the science, and I knew
Speaker 1: that it would take billions of dollars to ultimately do it.
Speaker 1: Luckily for the company, the science was starting to get
Speaker 1: a buzz. I mean, there was a lot of early
Speaker 1: excitement around our interference. You know, it was written up
Speaker 1: in as the as the as the molecule of the
Speaker 1: Year by Science in two thousand two. You know, Forbes
Speaker 1: wrote an article about it being the next billion dollar
Speaker 1: breakthrough in biotechnology. Al Nylum started doing deals with big
Speaker 1: companies Merk, Novartis, roche To Cada. Ultimately we raised over
Speaker 1: a billion dollars from pharmaceutical partnerships that we formed. Soon
Speaker 1: urn Ai as it became known was one of the
Speaker 1: hottest areas of biotech. Everybody wanted a piece. But then
Speaker 1: something alarming started to happen. Trials that used urn Ai
Speaker 1: started to fail. Companies began to leave the field, splashy
Speaker 1: acquisitions were written off, pharmaceutical partnerships ended. It started to
Speaker 1: seem like all Nyleum might also be headed for extinction.
Speaker 1: We had many, many near death moments as a company.
Speaker 1: We had one in where basically the entirety of the
Speaker 1: pharmaceutical industry, who we're working with us earlier to help
Speaker 1: fund the company and help advance some of the science,
Speaker 1: they basically gave up hope and they left the field.
Speaker 1: And so there was a very strong vote of no confidence,
Speaker 1: if you will, in what we were doing as a
Speaker 1: public company. We were trading under our cash. We had
Speaker 1: more cash on our balance sheet than we had stock
Speaker 1: value as a stock. So that it's a pretty dire moment.
Speaker 1: I can't emphasize this enough. Biotech companies fail all the time.
Speaker 1: Clinical trial results will be disappointing, investors will figure the
Speaker 1: science doesn't work, people pick up and move on. What
Speaker 1: happens much more rarely in biotechnology is what happened next.
Speaker 1: The company stuck with it, and thanks to John's fundraising
Speaker 1: through the good times, they had the cash to actually
Speaker 1: see the science through. After sixteen years of research, On
Speaker 1: August ten of this year, on Nylum won approval for
Speaker 1: on Patro, it's first drug and the first drug ever
Speaker 1: approved to use RNA interference. John recounts the moment, Oh,
Speaker 1: that's a funny story. I was actually on a stage
Speaker 1: talking to our field force. My long standing partner and
Speaker 1: our president, Barry green Um was looking at it at
Speaker 1: his emails as he often does, and he screams out, John,
Speaker 1: we just got approved. And sure enough, you know we did. Uh.
Speaker 1: And I was there and got a round of applause
Speaker 1: from everybody. Um, Barry came up, I gave him a
Speaker 1: big hug, and you know, off we went. So it
Speaker 1: was literally couldn't have been more. It could have been
Speaker 1: better planned. It was a watershed moment, not just for
Speaker 1: the company, but for the industry. At least a dozen
Speaker 1: biotech companies are working on therapies, which, like all Nylum,
Speaker 1: seek to treat disease at the genetic level. If All
Speaker 1: Nylum could do it, the hope is that they can too.
Speaker 1: In many ways. The drug represents the best aspects of
Speaker 1: the industry, but it also represents its insane economics. An
Speaker 1: Alum's drug will cost four hundred and fifty thousand dollars
Speaker 1: a year four hundred and fifty thousand dollars a year
Speaker 1: before any discounts. Only three thousand patients with this disease
Speaker 1: have ever been diagnosed. Even at that high price, was
Speaker 1: so few patients, it's unlikely that this drug will be
Speaker 1: profitable anytime soon. It is a long time between now
Speaker 1: and being profitable as a company. We can't do it
Speaker 1: on patrol alone. We obviously have other products in our
Speaker 1: pipeline to bring forward to ultimately um, you know, get
Speaker 1: to a point as a company where we could be
Speaker 1: a sustainable business. In its first three months on the market,
Speaker 1: the drug generated only a half a million in sales,
Speaker 1: a pittance in biotech. Investors are worried. Shares declined by
Speaker 1: more than this year, but the market still sees promise.
Speaker 1: The company has a market value of more than seven
Speaker 1: billion dollars. To give you a sense, that's about the
Speaker 1: size of Dunkin Donuts or Jet Blue, companies that are profitable.
Speaker 1: Unlike all Nylum, which has generated hundreds of millions in losses.
Speaker 1: But all Nylum isn't selling coffee or cheap flights to Florida.
Speaker 1: What they do can mean the difference between life and death.
Speaker 1: It's an awesome responsibility. But what keeps me going is
Speaker 1: the fact that we know we have an important approach
Speaker 1: for new medicines, and we have an ability to make
Speaker 1: a big difference in patients lives. And you know, every
Speaker 1: morning I wake up, I'm excited to go to work,
Speaker 1: even to this day. Here's the scary truth about drug development.
Speaker 1: It can be arbitrary. Scientific breakthroughs can send billions of
Speaker 1: pharmaceutical dollars into any given field, but one high profile
Speaker 1: failure can just as easily make that money disappear. Some
Speaker 1: companies survive, but many don't. Firms get sold, research teams disperse,
Speaker 1: patients die. Most drugs never go anywhere. They sit on shelves.
Speaker 1: Small percentage going to clinical trials, and many of those fail.
Speaker 1: But every so often one makes it through. And that's
Speaker 1: only the beginning. And that's it for this week's prognosis.
Speaker 1: Thanks for listening. Do you have a story about healthcare
Speaker 1: in the US or around the world. We want to
Speaker 1: hear from you. You can email me m Cortes at
Speaker 1: Bloomberg dot net or find me on Twitter at big Cortes.
Speaker 1: If you are a fan of this episode, please take
Speaker 1: a moment to rate and review us. It helps new
Speaker 1: listeners find the show. This episode was produced by Liz Smith.
Speaker 1: Our story editor was John Heckinger. Thanks also to Drew Armstrong,
Speaker 1: Francesco Levi's head of Bloomberg Podcasts. We'll see you next week.